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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: kodiak_bull who wrote (84774)	1/19/2001 1:32:40 PM
From: kodiak_bull	Respond to of 95453

Major U.S. oil companies to see sky-high profits By Paul Thomasch NEW YORK, Jan 19 (Reuters) - Capping a banner year for the energy industry, U.S. oil companies should show record profits next week when they start reporting results for a fourth-quarter in which natural gas and oil prices shot to decade highs. "The industry has had a helluva year and the fourth quarter is going to be a helluva quarter," said Gene Nowak, an analyst with ABN Amro. "Throughout 2000, everyone thought each quarter was a peak for earnings, but it just kept getting higher and higher." The reason is that crude oil and natural gas prices kept getting higher and higher, too. Crude oil for the quarter averaged $31.96 a barrel, up from $24.56 a year ago, while natural gas prices averaged $6.46 per million British thermal units, more than double the $2.48 they averaged a year ago. That made for a powerful combination in the energy business, where most profits usually come from exploration and production operations. As a result, every major oil company should post profits well above those of a year ago. In the case of Exxon Mobil Corp. <XOM.N>, profits should be up 70 percent, while Chevron Corp's <CHV.N> profits should rise 78 percent, and Texaco Inc.'s <TX.N> should more than double, based on estimates compiled by First Call/Thomson Financial. For the entire Standard & Poor's energy sector, overall earnings are expected to rise 93 percent, the biggest jump in corporate America. "When things go well, they really go well," said Fadel Gheit of Fahnestock & Co. "Combined, we've never had $30 crude oil and $10 natural gas coinciding. That makes for a very, very powerful quarter." LITTLE REWARD Still, the major oil companies have hardly been rewarded in the stock market for what have been staggering profits this year. The S&P index of international oil companies <.SPOILI>, which includes Exxon Mobil and others, climbed just 8 percent in 2000. And few expect oil companies to repeat their financial performance in 2001, with predictions of both lower crude oil and natural gas prices. That's not to say, however, that analysts are looking for a collapse from oil companies. Fahnestock's Gheit figures earnings in 2001 will be well above the last three- and five-year averages. For the moment, the biggest drag on energy companies is the chemicals business, where higher raw material costs have slashed profit margins. Occidental Petroleum Corp. <OXY.N> will be particularly hurt in a quarter that should show lower chemical earnings across the board. Refining and marketing, however, should show a rebound from a year ago, thanks to stronger profit margins on fuels such as gasoline and heating oil. Amerada Hess Corp. <AHC.N>, which is expected to earn $2.98 a share in the quarter, and USX Marathon <MRO.N>, which is tagged for $1.14 a share, should be two beneficiaries of the stronger refining and marketing business. And Phillips Petroleum Co. <P.N> should be one of the biggest winners of all during earnings season, thanks to the acquisition last year of Arco's oil and gas properties in Alaska. Fueled by an expected 70 percent rise in production from last year, Phillips earnings are seen more than doubling to $2.27 a share. "All in all, this is a quarter that the industry would love to have for years and years," said Fahnestock's Gheit. Oil Company Q4 EPS 2000 Consensus Q4 EPS 1999 Actual Amerada Hess $2.98 $1.94 Chevron $2.21 $1.24 Conoco $0.86 $0.51 Exxon Mobil $1.31 $0.71 Kerr-McGee $2.83 $1.46 Murphy $1.95 $1.00 Occidental $1.06 $0.52 Phillips $2.27 $0.84 Texaco $1.51 $0.67 ...

To: kodiak_bull who wrote (84774)	1/19/2001 2:59:02 PM
From: isopatch	Respond to of 95453

KB. Wow! Truly a great speech! Thanks for posting it/eom